Japanese, Australian firms eye coal-to-hydrogen exports

OREANDA-NEWS. Australian utility AGL Energy has teamed up with Shell and a group of Japanese companies to investigate the feasibility of a coal-to-liquids project that would export hydrogen from Australia to Japan, where it would be used as a road transportation fuel and for power generation.

AGL and Japanese engineering firm Kawasaki Heavy Industries will head the joint venture, which plans to use coal from deposits in Victoria. The A$496mn ($385mn) Hydrogen Energy Supply Chain (HESC) pilot scheme also includes the governments of Australia, Japan and the state of Victoria, as well as Japanese power generator J-Power, industrial gas firm Iwatani and conglomerate Marubeni, and Shell.

The planned four-year project will aim to demonstrate the feasibility of turning brown coal, or lignite, from AGL's Loy Yang mine in the Latrobe Valley in Victoria into hydrogen to be exported to Japan.

AGL's support includes providing land for the plant and up to 160t of brown coal. If the pilot is successful, a commercial hydrogen export facility would be built at the Port of Hastings in Victoria, Australian energy minister Josh Frydenberg said. The Australian and Victorian governments are providing a combined A$100mn in funding for the pilot project.

The amount of hydrogen being produced for the pilot is small and the emissions released are expected to be minimal. But carbon offsets will be purchased by the consortium to mitigate the impact.

Brown coal is the main generation fuel in Victoria, but many of the state's plants are expected to close over the next 15 years as they reach their end of design life.

Hydrogen produced by the plant would be used predominantly in Japan for the transport industry.

Several decades of studies on the use of hydrogen have yet to lead many commercial developments. Some of the potential uses for hydrogen include fuelling cars, buses, trains, trucks, ships, and industrial vehicles such as forklifts, a HESC spokesman said. Hydrogen can also be used in stationary fuel cells, which operate like large-scale portable batteries and can be used to power or heat homes, and for power generation.

Japan is the largest buyer of LNG and thermal coal produced in Australia.